Infracon staff are reeling after being told yesterday liquidators would be called in to the company.

Waiting to hear their fate at a company meeting in Woodville, workers said they knew the message wasn't going to be good.

"It's not a bloody pay rise," one man said before the meeting.

The interim directors of the company, including Tararua District Mayor Roly Ellis, made the decision to place the company into liquidation, admitting the more than 210 staff, in Dannevirke, Woodville, Hastings, Waipukurau and Palmerston North, were facing "uncertain futures".


"With five years of losses and with the long-term prospects extremely difficult, including continuing losses for the next two years, when we received a letter from the company's bank withdrawing financial support from Infracon we were left with no alternative," Mr Ellis said.

The company is 66 per cent owned by the Tararua District Council, with the Central Hawke's Bay District Council owning 34 per cent.

Peter Wimsett, the Tararua District Council's manager of strategy and district development, confirmed Infracon don't owe any creditors as of Wednesday night.

"Some money which was owed to Infracon was deposited into their account slightly earlier than normal," Mr Wimsett said.

And Mr Ellis said Infracon's directors have spoken to their preferred liquidators and he sees no reason why the 210 staff shouldn't be paid next week at least.

Infracon worker Peter Wilson was hoping the company would be sold and his job would remain secure. Mr Ellis said the board of directors had been working very hard to try and sell the company, rather than call in the liquidators.

"No other company has been prepared to pay anywhere enough to sort out this situation," he said.

And Mr Wimsett confirmed an investment of $5 million into the company would have been required to save it.

"That money would have had to come from somewhere," he said.

"To restructure Infracon would need a Capex investment of at least $2 million and to restructure the staff throughout Infracon would cost another $2.5 million and the company would have needed $500,000 in operational cash."

Ernie Christison, a member of the Dannevirke Community Board said he doubted ratepayers would want to stump up this kind of cash.

"People who think Infracon should have been saved by council don't know all the numbers," he said.

Mr Ellis said it was an extremely sad day for him and Peter Butler, the Mayor of Central Hawke's Bay.

But Mr Ellis conceded trading while Infracon was insolvent would have been illegal.

"The letter from the bank came as a shock," he said.

"But we've certainly given it our all behind the scenes trying to put together some sort of deal. But we have to be prudent and pragmatic."

Mr Ellis said Infracon's chief executive Darren Mason and its revenue officer had both been exceptional over the last two months. "We couldn't have asked for more," Mr Ellis said. "The last three or four days has been exceptionally difficult for them. And as Infracon staff lashed out at Mr King, he said his council had not walked away from Infracon.

"We just asked its interim board to bring forward a robust cashflow forecast," he said. "However, we [council] now have another opportunity to consider the best way we can perhaps employ some Infracon staff around the district in jobs such as parks and reserves.

"I think there will be community support for that."

Staff 'kept in dark' about company status

Workers at Woodville's Infracon site yesterday described themselves as the "mushroom society" - kept in the dark and not knowing what was happening.

"We're either going to be told we're shutting down or being taken over by somebody else, but we don't know," Peter Wilson, a worker with the company for three years, said. "We're all feeling the same, dreadful. And it must be bad because the mechanics have been told to take all the personal gear out of company vehicles."

A worker who has been with the company for 30 years said he knew where the blame should lie.

"I'm gutted, we've been shafted by our council," said the man, who did not want to be named.

For Paul Morris, the decision to leave another job for one at Infracon six months ago was haunting him.

"It's the unexpected," he said. "We're [staff] the mushroom society because we've been kept in the dark. I'm so annoyed I left my other job to work for Infracon because I'd been told my job would be secure.

"The morale at work has been low and we're all wondering what's going to happen. It hasn't been good coming into work each day with the uncertainty of our future hanging over us."

After three-quarters of an hour workers poured out on to the street as they tried to take in the news they had just been given.

"We've been told the liquidators are coming in," Mr Wilson said. "Our council has washed their hands of us and stabbed us and the ratepayers in the back."